The board of directors of Inter Pipeline has recommended that its shareholders accept Brookfield Infrastructure Partners’ revised takeover offer of C$20/share (€13.50/share).
The board consulted with legal and financial advisors, and with the special committee of independent directors it set up to scrutinise the takeover offers from Pembina and Brookfield. Inter Pipeline shareholders will be able to opt to receive cash or 0.25 of a Brookfield Infrastructure Corporation class A exchangeable subordinate voting share. The board says the offer, announced on 19 July 2021, is ‘a significant improvement’ on the previous offer of C$19.50/share, announced on 2 June, 2021, and the initial offer of C$16.50/share.
Inter Pipeline rejected Brookfield’s initially hostile takeover attempt in February 2021, saying that it undervalued the company. It subsequently announced in June 2021 that it had agreed the sales deal with Pembina. Pembina terminated its agreement to buy Inter Pipeline on 26 July 2021, after the Inter Pipeline board said that it would not reconfirm its recommendation to shareholders to vote in favour of the deal, and instead said that it was open to discuss Brookfield’s higher offer.
‘To maximise shareholder value we ran a fair and comprehensive strategic review and as a result Brookfield increased its offer by approximately 21%,’ says Margaret McKenzie, chair of the board and the special committee. ‘After thoroughly considering the alternatives, the board has concluded that the value and flexibility inherent in the revised Brookfield offer, including the significant cash component of the offer and the option for a potential tax-deferred rollover for certain Canadian shareholders, makes it appropriate to recommend acceptance of the revised Brookfield offer to our shareholders.’